Independent Trustee Services Ltd & Anor v Knell  EWHC 650 (Ch)
Is a case concerning the construction of a Deed of a Pension Fund.
Norris J stated at 
The correct approach of the court to questions of construction has been restated on a number of recent occasions. I have been referred to the Investors Compensation Scheme case  1 WLR 896, Stevens v Bell  EWCA Civ 672, Armitage v Staveley Industries  EWCA Civ 792 and Chartbrook v Persimmon Homes  UKHL 38. Without attempting to reformulate any of the authoritative statements which these cases contain I would summarise my approach to the problem before me as follows:-
(a) The intention of the parties is to be ascertained from the words which they have used read in the context in which they occur:
(b) The context includes the whole of the document in which they are used:
(c) The context also includes anything which would have affected the way in which the language of the document would have been understood by a reasonable man:
(d) The law excludes from the admissible background both previous negotiations of the parties and their declarations of subjective intent (these being relevant only to questions of rectification):
(e) In general, words should be given their ordinary and natural meaning because people generally do not misuse language, particularly in formal documents:
(f) A party may, however, make out a strong case that something must have gone wrong with the language (a “strong” case because the law does not regard the proper use of language and the misuse of language as equal possibilities), in which event the law does not require judges to attribute to the parties an intention which they plainly could not have had (for example, because the absolutely literal meaning produces an absurd and irrational result):
(g) If it is clear that something must have gone wrong with the language, and if it is clear what a reasonable person would have understood the parties to have meant, then the court will give effect to that meaning (the task of the court being to decide what a reasonable person would have understood the parties to have meant by using the language which they did):
(h) Within the context of a pension scheme the interpretation must be one that is practical and purposive, and if more than one interpretation is possible, the correct choice may depend on the practical consequences of choosing one rather than the other:
(i) But what is not permissible is for the court to construct for the parties by reference to the context a bargain or arrangement that they did not make themselves:
(j) Nor is it permissible for the court to approach the document to be construed with some predisposition as to the correct philosophical approach.
The difficulty does not lie in the statement of the relevant principles. It lies in their application to the particular case.
Of particular relevance in connection with the consideration identified in paragraph 10(h) is the observation of Neuberger J (as he then was) in Bestrustees v Stuart  OPLR 341 at paragraph 34 that:-
“…A pension scheme is likely to continue for a substantial period of time and…those most affected by them and entitled to protection from the Trustees, the employer and indeed the court, will be people who are comparatively poor, who will not have easy access to expert legal advice, and who will not know what has been going on in relation to the management of the Scheme. In those circumstances, it seems to me that protection of the beneficiaries requires the Court to be very careful before it permits a departure from the plain wording and plain requirements of the Trust Deed“.
In para 40 he said:
“I refer back to the point to which I have already made reference, namely, that bearing in mind that this is a trust, and bearing in mind the likely long life of this trust and the ignorance as to what has been going on on the part of the beneficiaries, it seems to me that the Court should not be too ready to waive a requirement of written documentation when the Scheme, and the trust deed under which it is set up, specifically require it. Of course, in this sort of case one often finds oneself treading the somewhat blurred line between requiring the terms of a particular deed to be complied with, while not being too pedantic and exacting in one’s requirements.”
Norris J ordered costs to be paid out of the assets of the fund
“I will order that all costs incurred by the Claimants and the Defendant in respect of these proceedings be paid by the Claimants from the funds held subject to the trusts of the Scheme (such costs to be assessed in default of agreement on the indemnity basis)”